Global Economics

London Games 2012: Lessons from Beijing

The British capital can't match China for spending or flash. It aims instead to emphasize fun at the 2012 Summer Olympics

The over-the-top pageantry of the 2008 Beijing Olympics has left many Londoners wondering how Britain's capital can live up to expectations when it hosts the next summer Olympiad in 2012. The city's mayor, Boris Johnson, summed up the mood: "We've been dazzled, impressed, and blown away by these Beijing Games," he says, adding, "but we've not been intimidated."

Brave words, but the London mayor knows he's got his work cut out to match what International Olympic Committee Chairman Jacques Rogge rightfully called an "extraordinary Games." The British capital has a budget of just over $17 billion to deliver London 2012, compared with the $44 billion that Chinese authorities spent on the Beijing Games. China bulldozed neighborhoods to make way for the Games and throttled factories and driving in a scramble to clean up Beijing's polluted air, but British officials enjoy no such impunity. Indeed, they're already coming up against taxpayer outcry over plans for the Olympic site in East London.

All the more reason for London to pay close attention to where Beijing succeeded—and a few areas where it could have done better. For instance, although Beijing's operations worked with clockwork precision, many events were surprisingly short on spectators (BusinessWeek.com, 8/15/08). London has already said it aims to avoid that by making more seats available to Londoners at discount prices.

Party-Loving Britain

"London definitely could take lessons from how the [Beijing] Games were run," says James Kennell, senior lecturer in tourism and urban renewal at the University of Greenwich east of London, who figures investments made in the runup to London 2012 will add more than $3 billion to the country's gross domestic product over the next four years.

Perhaps the most important difference, London officials say, will be the overall atmosphere and attitude of the event. Beijing 2008 was a statement from Chinese authorities about the country's rising global stature and economic power. But many visitors felt that the tight security and prickly, protest-wary officials made Beijing the "no fun" Games. Leaders in party-loving Britain already are talking of a more laid-back approach for 2012.

"The best parties aren't always the ones that cost the most money," says Tim Parr, head of capital programs and major events for Deloitte's consulting practice, who was part of a team sent by the London Organizing Committee of the Olympic Games to learn from Beijing. "The challenge for London is to create a party atmosphere with a great sporting experience."

History of Project Delays

Of course, that means pulling off the planning and construction on time. Unfortunately, the British capital doesn't have the best track record for managing multibillion-dollar projects. Most recently, the new Wembley Stadium—the country's national soccer arena—was completed a year late and roughly $200 million over budget. The so-called Millennium Dome similarly cost $1.3 billion to build in the late 1990s, but after a brief series of events around the turn of the millennium, it sat unused for years before American billionaire Philip Anschutz bought the tent-like structure at a huge discount and turned it into a successful concert venue (BusinessWeek.com, 7/20/07).

Ahead of London 2012, experts figure Britain also must match China's success in transport and security. An estimated $1.3 billion of London's $17 billion budget will be spent on upgrading the city's 100-year-old underground and rail system. A further $407 million is earmarked for Olympic policing, a 15% budget increase since the city won the right to host the Games back in 2005.

Where London really could make its mark, though, is in offering a quirkier and more intimate Games compared to Beijing's flashy facilities and choreographed mega-spectaculars. That spirit was on show during the Beijing closing ceremonies, when beloved Led Zeppelin rocker Jimmy Page and soccer superstar David Beckham were featured in the handover from Beijing to London. In sharp contrast to China's big-budget productions, British officials said they had wanted to put on a more understated and casual show.

More Tickets for Locals

How will that translate into the London 2012 Olympics? According to Deloitte's Parr, the next Summer Games will be a more social event, with big TV screens and food vendors spread throughout the Olympic site. That will allow spectators to continue the party even after the sports have stopped—as well as letting those without tickets to get into the Olympic spirit. "The key is to create atmosphere at the venues," Parr says.

London aims to eliminate Beijing's problem with empty seats by making more tickets available to locals. Running legend Sebastian Coe, the chairman of the London Organizing Committee, has suggested that unused tickets held by sponsors—a source of many of the Beijing no-shows—could be resold to the public if they're not allocated by a certain date.

All that should help create more of a carnival atmosphere than the Beijing Games provided. Formerly imperial Britain—now more laid-back than ambitious, upwardly mobile China—will be hosting its third Olympics and has less to prove to the world. As long as security is effective but not heavy-handed, London should manage to provide Olympians and guests a great time.

As for attitude, the famously dry British humor was on display when reporters asked Boris Johnson if he had any criticism of the 2008 Games. No, the mayor responded, and then added jokingly in reference to the controversial dubbing of a young singer in Beijing's opening ceremonies: "Had it been us, I don't think we would have necessarily done the switcheroo with the girl."